Advantages & Disadvantages of Filing Bankruptcy

Advantages & Disadvantages of Filing Bankruptcy

If you are considering filing for Chapter 7 or Chapter 13, it is important to understand all of the consequences. No two filings are the same, so it is important to discuss your individual financial situation with a knowledgeable lawyer before filing. For general guidance, below are a few of the pros and cons of seeking bankruptcy protection:

Pros of bankruptcy:

Most, if not all, of your debts will be eliminated.

All collection efforts against you will stop, including collection telephone calls, garnishments, and lawsuits.

You may be allowed to keep most or all of your assets.

You may be able to remove inferior liens from your home.

You can obtain a fresh financial start, relieving the burden of your overwhelming debt.

Cons of bankruptcy:

Your credit score will be damaged. However, many debtors already have a low credit score due to past due payments, so the impact of filing for bankruptcy is negligible.

Depending on what chapter you file and your unique circumstances, there is a small risk of losing some of your assets.

You are not allowed to file another bankruptcy case for 8 years for a Chapter 7 and 4 years for a Chapter 13.

To learn more about filing for bankruptcy protection, contact The Koplen Law Firm.

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